Agents' Summary of Business Conditions - August 2012

We regularly publish a summary of reports compiled by our twelve regional Agents following discussions with at least 700 businesses across the UK every reporting period.

Published on
15 August 2012

The rate of growth of spending on consumer goods and services had slowed further.

The housing market had weakened somewhat in recent months, but contacts were uncertain whether that reflected temporary factors.

Contacts’ plans for capital spending had softened and the level of investment was expected to grow only very modestly over the next six months.

Export growth had moderated significantly, largely due to weakness across the euro area.

The pace of growth of turnover in the service sector had slowed further.

Manufacturing output growth had eased and the level of activity was only slightly higher than a year earlier.

Construction output continued to contract, due in large part to the dwindling pipeline of public sector work. Recently, temporary factors had also pushed down on the level of activity.

Credit conditions remained polarised between those able to borrow at reasonable rates and those unable to secure finance at a cost that was acceptable.

Employment intentions remained fairly flat. In an uncertain environment, businesses were hesitant about committing to changes in payroll until the outlook became clearer.

Capacity utilisation in the manufacturing sector was a little below normal, while there was a significant degree of spare capacity in services.

The rate of growth of labour costs per head remained restrained and had fallen in recent months.

Inflation in the cost of raw materials continued to moderate, in large part due to weakening demand growth in the rest of the world.

The pace of inflation in manufacturing output prices was declining in response to softening cost pressures. Taken as a whole, fees for business services were broadly unchanged from a year earlier, in large part due to persistent spare capacity in much of the sector.

Consumer price inflation continued to fall back towards the 2.0% target.

Visiting the museum

We have placed cookies on your device to help make this website better

Some of the cookies we use are essential for the site to work (for example, to manage your session). We also use some non-essential cookies (including third-party cookies) to help us improve the site. By clicking ‘Accept’ on this banner, or by using our site, you accept our use of cookies. You can also view our Cookies statement and learn how to control or disable them.